Want to Park Your Hard Earned Money - Invest In NMDC with Regular Return In the Form of Dividend

The Indian PSU, NMDC is India'slargest iron ore producer and recently ventured into diamond exploration also.
The cash rich company came out with its Q1,FY17 result with 711.34 Cr which is
lesser than the corresponding year profit. The revenue also went down due to
suppressed price point of iron ore. The main reason of lower profitability is
the contribution from other income as company bought back more than 80 Cr share
from government which is 20% of total
share at a price point for INR 95. On top of that company also gave 855% dividend to investor. The cash position of
the company went down drastically but at the same time, the current share price
of INR 101.35, is an opportunity for investor to jump in and start accumulating
during market selloff days.

The share buyback will have
positive impact on P/E as well as EPS. The Indian economy is on verge of growth
which will be led by infrastructure given the fact that government already
cleared more than $10 Bn projects in Infrastructure. The steel sector is
gaining ground and thanks to Minimum Import Price imposition by government to
mitigate impact of steel dumping in India.

The passage of GST by Indian
parliament is also going to lift the sentiments of Industry and it seems that
revival of many stall project is going to take off.

It is advisable that investor
should pick the share during sell off days and keep it for minimum two years
and am confident that company will keep offering good dividend and the revival
of economy will revive the share price of the company.

About
Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.